Return to Main Page

Go back to March 5

Monday, March 6, 200

Monday morning started off with our first company visit.  Since technically we are supposed to be learning about doing business in China, and not just taking a vacation, the school set up visits to several different companies.

After breakfast, we boarded the bus and drove to Beijing Bama.  Bama is an American company based out of Tulsa.  Their main product is the apple pies for McDonald’s.  When McD’s moved into China, they asked Bama to come with them.  This was a really good idea for McD.  They wanted to be able to maintain the same quality of food at all of their restaurants all over the world.  Importing from their reputable, hand-picked suppliers in the US was too expensive.  They needed everything to be produced locally.  For some items, McD found local suppliers.  For other things, they asked the suppliers to set up locations around the world. 

On the way to Bama, we passed miles and miles of high-rises; all government housing complexes.  The Bama building was located in front of a very new housing complex.  It was obviously privately owned.  It looked like a townhouse development right out of the American suburbs.  There was even a flashy billboard in front of it, advertising that there were still units available.  I did not ever see anything like this anywhere else in Beijing.

Bama was located in a small, free-standing building.  We were led into a conference room by a Chinese woman who spoke perfect English.  After we were seated, a tall, curly-haired American man of about 50 years old walked in and greeted us.  He was Bernie Sheridan, the General Manager of Beijing Bama.  (Genreal Manager is the same thing as a CEO in China.) 

Bernie had been living in China for about 17 years.  He spoke fluent Mandarin.  He used to work for McDonald’s in China.  McD wanted to send him back to the US, but he didn’t want to go.  He offered to help get Bama up and running in Beijing.  Bernie was out-going and charismatic, and obviously loved his job, his employees, and China in general.

Beijing Bama was founded about 6 years ago.  About $12 million US had been invested in building the factory – and it would have cost three times that much to build a similar facility in the US.  When the plant first opened, they had only one pie line.  They have since added an additional line. 

At first, Bama made only apple pies.  Apple pies were not a big seller in China.  It’s just not something that the Chinese people are used to.  McD did some market research and recommended some other flavors for Bama.  Today, their biggest seller is taro pie.  Taro root is kind of similar to a sweet potato, but it’s purple.  Their second-biggest seller is pineapple.  They also sell chicken, tuna, and several other flavors of fruit pies.  I sampled the pineapple, and it was very good.  I am assuming that the meat pies are not sweet – they are probably more like a pot pie or a Hot Pocket.  The pies sold in China are still deep-fried, unlike the ones in the US, which are now baked.

Bama now sells products to companies other than McD.  They make pocket-type pies for several companies in China.  They also have a line of baked goods such as cakes and breads.  The cake and bread business is still very small.  All of those items are still made by hand in a giant kitchen. 

Bernie took us on a tour of the plant.  Their pie line was not running that day, so the plant floor was very quiet.  We had to wear lab coats and hair covers, although we did not need shoe covers, gloves, or masks, as would be required in a drug plant.

The pie line itself looked very similar to any pharmaceutical manufacturing line I’ve seen.  Lots of stainless steel equipment, large tanks, a filling line with a conveyer belt.  Bernie showed us how the raw materials are taken from a huge refrigerated warehouse, loaded onto a conveyer belt, and poured into a huge mixing tank.  Pie shell ingredients go into one tank; filling ingredients go into another.  After mixing, the pie shell dough is extruded onto a moving conveyer belt.  Filling is extruded onto it, then another layer of pie dough is added.  The individual pies are cut apart, deep fried, and flash-frozen before packaging. 

I have seen many plants like this, but this was the first plant tour for many of the people in the class.  Everyone had a million questions, and Bernie was very good about answering all of them.

One thing I found interesting was that the plant had its own well-water supply.  At drug plants in the US, municipal water is usually purified for use in drug manufacturing.  This is not really an option in Beijing.  I don’t know if I mentioned this before, but you can’t drink the tap water in Beijing – not even to brush your teeth.  The locals can’t drink it either.  Everyone drinks and cooks with bottled water.  A gallon of water costs more than a gallon of milk in Beijing.  Bama would not have been able to cost-effectively purify tap water that started out that dirty, so they drilled their own well, far below the contaminated water table used by the city. 

After the plant tour, we returned to the conference room and had a chance to sample some of the different pies.  Bernie told us how he had built a world-class company in China.  He was very devoted to his employees.  He paid above the median wage, and offered them plenty of career development opportunities.  He was the only ex-pat working for the company – everyone else was Chinese.  I was very impressed with Bernie and his company.  He really had a nice little organization set up there.  When we left, he gave us each a Bama Beanie Baby.

After the Bama visit, the bus dropped us off at the hotel and we were left to find lunch on our own.  Leon recommended a noodle shop a few blocks away from the hotel.  Margaret, Kris, Jamie and I walked there.  The noodle shop was small, and set up like a fast-food restaurant.  The girl working at the counter did not speak English.  She brought out a menu that was written in English so that we could point to which item we wanted.  However, the menu didn’t give a description of the item; just the name.  I ordered plain chow mein, not really sure what I would get.  Kris was not so adventurous.  She wanted to know what was in each dish.  She kept asking the poor counter girl over and over, but she just didn’t understand.  Kris was getting frustrated and started yelling at her.  Finally, a manager who spoke a (very) little English came out.  Kris was finally able to order, but as we walked to the table, she continued to grumble. 

My chow mein turned out to be spaghetti noodles in tomato sauce with onions and green peppers.  It was pretty good, and was a huge serving.  I’d paid about $2 for it.  Kris was mildly happy with her lunch, although she continued to complain that it wasn’t exactly what she wanted.

After lunch, I wanted to find a place where I could buy a small notebook.  Somehow I’d forgotten to bring my leather notepad, and I didn’t have anything to take notes with at the meetings.  I wanted to stop in a drug store and pick one up, but Kris said she’d been in a drug store the day before and all they had was drugs.  We walked by a mall on the way back to the hotel, and I decided to stop there.  I didn’t end up finding a notebook, but I did find something interesting – a dollar store.  Actually, it was a 10 Yuan store.  Ten Yuan is about $1.25.  I wandered around in there looking at all the stuff.  It was very similar to an American dollar store – everything from cleaning supplies to shampoo to underwear.  But of course, all the brands were weird and all the packaging was printed in Chinese. 

In the afternoon, we went to the US embassy to meet with someone from the Commerce Department.  The embassy office was located in a large office building.  We had to show our passports to get in.  The embassy seemed to be staffed mostly with English-speaking Chinese.  We were led into a conference room and left there by the receptionist.  We waited for a long time.  At first we didn’t talk much, but then we started getting a little silly.  Someone wondered whether the Chinese government was taping everything we were doing. 

Finally, the guy we had come to see arrived (I don’t remember his name).  He didn’t seem like he wanted to be there.  He was an American working for the Commerce Department, and was on a 4-year assignment in Beijing.  His office helped American companies get established in China.  They only worked with American companies that wanted to export goods to China; not companies that wanted to manufacture in China and import into the US.  They do market research and provide local contacts and things like that. 

We asked him a few questions about how one would go about breaking into the Chinese market.  His answer to just about every question was, “Well, that’s outside our area of expertise.  You’d have to hire a private consultant for that.”  Finally, I asked him, “What is the advantage of working through your office rather than just going through a private consultant to begin with?”  He replied, “Well, we’re cheaper.  We do charge a fee for our services, but it’s nominal.  Also, we can provide some assistance in dealing with the Chinese government if needed.”

I asked, “Do you keep any metrics?  Do you know if you’re actually helping any companies?”  He said, “Yes, we keep track of which companies have consulted with us.”  I prodded further, “But how do you track whether you actually make a difference, or if those companies would have figured things out in China on their own?” 

At that point, Phil interrupted me and brought the meeting to a close.

I have a big problem with this whole thing.  Providing assistance in dealing with the government is one thing, but I don’t feel that doing market research in China is a good use of my tax dollars.  I don’t think this office has any place in the US government.  I mentioned this to some of my classmates after we left.  Most of them disagreed with me.  They felt that hiring private consultants would be too expensive for small companies, and working through the Commerce Department would be the only way for them to break into the market.  Based on what we’d heard at the meeting, I really didn’t get the impression that the Commerce Department was helping anyone break into the Chinese market.  They seemed to be in the business of charging fees to give referrals to private consultants.  

Furthermore, I don’t believe that the government should be paying for something just because you can’t afford to buy it on your own.  Again, my classmates disagreed.  I go to school with a bunch of socialists.

After learning about the socialist nature of the US government, we stopped at a market to witness Chinese capitalism in action.  The market was located in a gigantic 7-story building.  Each floor was dedicated to a different type of merchandise.  High-end jewelry was on the top floor, then costume jewelry, purses, housewares, and clothing.  All of the purses and watches and clothing were designer knock-offs.

 Each floor was set up in a grid with a single seller occupying each square of the grid.  It was extremely crowded.  As we walked down the aisles, the sellers were constantly saying, “Hello, hello, lady.  Lookie!  You want to buy purse?  I have Coach, Gucci, good quality!”  It never stopped and they wouldn’t take no for an answer.  Mitesh and Manzoor became infatuated with some fake Rolexes.  They spent hours at the watch counter, and eventually walked away with about 30 watches for around 80 Yuan each – about $10.

 I spent a long time wandering around, but didn’t buy much.  I really wanted a new fake Prada purse, but couldn’t find one.  One girl told me that it had gotten “too dangerous” to sell Prada, but tried to talk me into a Louis Vitton instead.

 Shopping at that market was really exhausting.  I was so tired of being harassed by the sellers by the time we left.

 I got down to the bus about 15 minutes early.  Jaime was there, and mentioned that he had just eaten a sandwich from the Subway across the street.  He and I walked back over there and got two Tsing Tao beers to go for a total of $3.  You gotta love Beijing.

Go to March 7